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Comair - Interim Report Dec 2009 Final


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Comair - Interim report Dec 2009 final

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Comair - Interim Report Dec 2009 Final

  1. 1. Comair Limited Incorporated in the Republic of South Africa Registration number 1967/006783/06 Share code: COM ISIN: ZAE000029823 ("Comair" or “the Company” or “the Group”) Unaudited Interim Results for the six months ended 31 December 2009 Performance review The Group performed well during a difficult trading period of continuing recession, and was able to marginally increase attributable profit by 3% to R33million (comparative period: R32million) resulting in earnings per share increasing from 7.9 cents to 8.1 cents. Passenger volumes remained constant in a declining market while turnover declined due lower ticket prices on the back of a lower fuel cost. Cash on hand remained strong at R253 million. We continued to see the benefit of our cost saving initiatives throughout the Company. Passenger surveys conducted on both brands confirmed our high service levels, and we achieved further improvement in our on-time performance. On the back of this we were able to increase our market share. We continued to invest in our affiliated businesses with on-line travel showing good growth over the period. Prospects There are no clear indications of economic recovery in the local market for air travel, although we do expect the South African market to follow the first signs of recovery seen overseas. We have embarked on further expansion out of Lanseria to both Durban and Cape Town and were recently awarded further licenses into Africa. While we are cautiously optimistic about higher volumes over the World Cup, this may be tempered by the difficulty in predicting patterns of demand and supply and the significant challenge this presents to pricing airline tickets for this month long event. Comair recently signed a purchase agreement with Boeing for eight new generation B737-800 aircraft for delivery over the period 2012 to 2015, subject to certain financing arrangements being finalised. Effective financing mechanisms are currently under consideration and shareholders will be informed thereof in due course. These eight aircraft will be in addition to two B737-800 aircraft recently acquired on operating lease and already flying in kulula colours. The new fleet will deliver significant improvements in operating efficiency, passenger comfort and environmental impact. At the end of the reporting period an aircraft previously acquired for cash was refinanced. There was no significant impact on earnings arising from this loan during the reporting period.
  2. 2. Our priorities remain safety, operating efficiency, conservative cash management and superior customer service while seeking new growth opportunities for both the airline and travel businesses. Dividends No interim dividends have been declared as it is company policy to consider one dividend annually. Director’s appointment Mr R Yasas Sri Chandana was appointed to the Board as the Financial Director on 15 September 2009. Basis of preparation In terms of the Listing Requirements of the JSE Limited, the Group has prepared the consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) and IAS34 and in terms of the Companies Act (Act 61 of 1973) as amended. The accounting policies used in the preparation of these results are consistent in material respects with those used in the financial statements for the year ended 30 June 2009. The following new standards and amendments to standards have become mandatory for the financial year beginning 1 January 2009: IAS 1 (revised) – Presentation of Financial Statements. The Group has elected to present one performance statement: namely a statement of comprehensive income and to rename the balance sheet to the statement of financial position. The interim financial statements have been prepared under the revised disclosure requirements. IFRS 8 – Operating segments. This standard requires a ‘management approach’ under which segment information is presented on the same basis as that used for internal reporting purposes. On this basis non airline businesses which in aggregate contribute more than 10% of profit before tax have been disclosed separately.
  3. 3. Abridged Group Statement of Comprehensive Income Unaudited Unaudited Audited six months six months year 31 Dec 31 Dec 30 June 2009 2008 2009 R '000 R '000 R '000 Revenue 1,415,703 1,606,846 3,048,782 Operating expenses (1,361,835) (1,552,672) (2,920,083) Profit from operations 53,868 54,174 128,699 Investment income 16,319 11,951 34,033 Interest expense (23,775) (26,403) (49,138) Share of profit (loss) of associates (3,010) 2,210 170 Profit before taxation 43,402 41,932 113,764 Taxation (10,782) (10,172) (40,715) Profit after tax attributable to the equity holders of the parent 32,620 31,760 73,049 Other comprehensive income Fair value adjustment on cash flow hedge net of taxation 5,181 17,862 (18,193) Total comprehensive income for the year attributable 37,801 49,622 54,856 to the equity holders of the parent Earnings per share (cents) 8.1 7.9 18.2 Headline earnings per share (cents) 8.1 7.9 19.6 Diluted earnings per share (cents) 8.1 7.9 18.0 Diluted headline earnings per share (cents) 8.1 7.9 19.4 Dividends per share (cents) 5.0 - - Weighted ordinary shares in issue ('000) 400,814 400,805 400,814 Diluted weighted ordinary shares in issue ('000) 404,510 404,211 405,873 Depreciation (R '000) 64,457 53,653 105,874 Reconciliation between earnings and headline earnings Profit attributable to equity holders 32,620 31,760 73,049 Add: IAS 16 loss on disposal of property, plant and equipment - - 5,608 Headline earnings after tax 32,620 31,760 78,657
  4. 4. Abridged Group Statement of Financial Position ASSETS Property, plant and equipment 961,765 893,714 912,043 Investment in associates 76,317 65,186 73,637 Available-for-sale-investments 142,290 120,870 131,580 Current assets 573,642 472,007 583,526 1,754,014 1,551,777 1,700,786 EQUITY AND LIABILITIES Share capital and reserves 537,197 511,278 517,722 Interest-bearing liabilities 439,242 353,342 360,582 Deferred taxation 84,317 27,687 68,310 Current liabilities 693,258 659,470 754,172 1,754,014 1,551,777 1,700,786 Net asset value per share (cents) 134.0 127.6 129.1 Unaudited Unaudited Audited six months six months year 31 Dec 31 Dec 30 June 2009 2008 2009 R '000 R '000 R '000 Abridged Group Statement of Cash Flows Cash and cash equivalents at the beginning of the period 309,220 125,004 125,004 Cash from operations and investment income 53,390 223,373 363,629 Dividends paid (20,040) - - Taxation paid 8,672 (13,351) (13,288) Cash utilised in investing activities (130,577) (98,184) (195,549) Net effect of share trust activities - (504) Increase in interest bearing liabilities 32,086 (6,991) 29,928 Cash and cash equivalents at the end of the period 252,751 229,851 309,220 Abridged Group Segment Report Segmental Revenue Airline 1,401,870 1,594,515 3,021,830 Non Airline 13,833 12,331 26,952 1,415,703 1,606,846 3,048,782 Segmental Results Airline 47,505 47,703 111,970 Non Airline 6,363 6,471 16,729 Profit before taxation 53,868 54,174 128,699
  5. 5. Investment income 16,319 11,951 34,033 Interest expense (23,775) (26,403) (49,138) Share of profit (loss) of associates (3,010) 2,210 170 Profit before taxation 43,402 41,932 113,764 Abridged Group Statement of Changes in Equity Opening Balance 517,722 459,942 459,942 Total comprehensive income for the period 37,801 49,622 54,856 Dividends paid (20,040) - - Equity settled sharebased payment adjustment 1,714 1,714 3,428 Net effect of share trust activities - - (504) Closing Balance 537,197 511,278 517,722 By order of the Board D. Novick G.S. Novick E.R. Venter Chairman Joint CEO Joint CEO 16 February 2010 Company Secretary D Borer 1 Marignane Drive Bonaero Park 1619 PO Box 7015 Bonaero Park 1622 Transfer Office Computershare Investor Services (Pty) Ltd 70 Marshall Street Johannesburg 2001 PO Box 61051 Marshalltown 2107 Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)